location next to the seat of government, and the favorable occupancy costs fixed through 2021 makes it ideal for any other years, so i ask that you look at this not just in the context of what is needed for the community justice center, but is this an intelligence securing a space on a long-term basis at a fixed-base rate for our needs into the future. again, to give a little context to the picture of our space needs, we have got about 1.9 million square feet of city- owned offices, that is owned offices within the civic center and around the hall of justice. out of that 1.9 million square feet, we have about 5000 square feet of vacancy, and these are the occupancy rate today, 99.8%, so we are simply a few grant- funded positions or one program away from meeting space, and that is in fact what we are

doing right now in the marketplace, finding space for these one-off needs, because we do not have any space in our portfolio. finally, i would like to note that we did negotiate one opportunity for a termination of the lease, and that provides for a notice in june 30, 2015, with an effective date of june 30, 2016. the landlord wanted pretty significant notice in order to be able to re-purpose and release the space, so it is a one-year notice, but if we determine that these are not needed at this location at that time, we do have that ability, for whatever reason, to terminate without penalty. conversely, if we agree to stay for that remainder five-year term, we also have negotiated provision for additional tenant improvements of up to $108,000 for the state -- space, so we

can refresh the space during this 10-year occupancy. the budget analysts has recommended some things, and we appreciate the meticulous nature of that review and certainly agree with those changes. we did miss a couple of dates there. i am joined by the ceo, and public health officials are also here to answer any questions you may have, and i am happy to answer any of your questions, as well. thank you for your time. supervisor chu: thank you. i am sure we will have some questions, but before that, i want to go to the budget analysts report. any questions at the moment? sir? >> on page 8 of our report, we point out as shown in table 1 the total cost of the proposed 575 polk street least to the city, and that would be over the lease, over $3 million.

that is for the continued operations of the 575 mes -- least -- lease. i would point out on page nine, as you know, the rent has been funded from the courthouse construction funds. there is a deficit in that fund, and what will happen is that the general fund will kick in to pay for the rental costs if that fund continues to have problems. we have no recommendation about that. i simply wanted to point that out to the supervisors. on page 10 of our report with regard to the expansion option, as shown in table two, the rent and operating expenses for dph

at 555 would be over $2 million, and that would be for the continued operations of the community justice center. on page 11 of our report, which point out that the superior court has entered into a tool hundred thousand dollars, two- year agreement with the rand corp., a nonprofit organization, to conduct a nonprofit -- to conduct a study, which should be finished in 2013, so our recommendations are on page 12, and as mr. updike has indicated, our first recommendation is we recommend that you amend the proposed resolution on page 2, 5, to change the correct date of when this is the transfer of maintenance and operation responsibilities for the polk street facility. it should be december 31, 2008,

and again, to amend the same relation -- resolution to obtain the correct date of when the 575 polk lease expires, june 30, 2011, and we recommend you approve that resolution as amended. regarding the other resolution, which you consider that to be a policy decision because of other results of the independent evaluation of the community justice center. it will not be known until the evaluation is completed in late 2013. that resolution would exercise an option to continue the lease for the community justice center for eight years and four months, which would commence in march 2013 and extend through july 31, 2021. i would be happy to respond to any questions. >> thank you, mr. rose -- supervisor chu: thank you, mr.

rose. i do have some. mr. updike? i think you talked about the package is being separate bowl -- being able to be separated. where the cjc is currently located, i thank you said if we would support the package, the terms could change? please speak to that a little bit more. >> that is correct. we have structured this to allow for what is called an expansion option, so there is essentially one master document that pertains to the occupancy of both the forest and the second floor. to separate out the second floor issue and make its short-term means we would have to renegotiate the lease and such a way to keep them separated, so we would have to strip out the expansion option issue or modify it significantly. the landlord had indicated to us that if there is not that

certainty of term, certainly at least until the first opportunity for exploration and 2015, the base rate would go up significantly to market, which is not an unreasonable position for the landlord to be taking, the idea being that they are providing us a break, because we are willing to commit to a longer-term. >> and in terms of beef -- least expansion, -- lease expansion, i just wanted to be clear that we are already in that space. it is just the sublease from the culinary group. >> yes. when that sublease expires, we do not have any rights. this captures the space under a new document, this master lease. supervisor chu: a kick, and there is a question about the space, and particularly the cjc

-- ok, and there is a question about the space. whether there is a program that should continue, and i know there is a rand study coming out that while deal with the effective use of the program, or maybe not, but i think many of us are in the mind that we do not want to be locked into a long-term lease when we may not have an interest in continuing the program, but separate and apart from that, one of the things you talked about, if we do continue forward with this please, there is quantity future demand and future use of the space and that we also ratified- year out clause. can you speak more about that component, and really how does it compare in terms of rental rates out there? i think you speak and alluded to this a bit. in any case, whether we support cjc going forward or do not, it does seem like the city has a

need to get additional space going forward, and it seems you are suggesting that the rates we are getting under this agreement would be favorable for the city. >> yes. i am not sure i could articulate that better than you did, chair chu, but we of a backlog. we are out in the marketplace looking for shorter-term lease is that we could find, so if we find opportunity is -- if we find opportunities in our own buildings, we would want to move them, but, frankly, we are out of space. adult probation is an issue. we have a space need there. grant funded programs, like the department of environment which has grown into where we have really put them in the memorial buildings. they will be ebidta as part of that seismic retrofit coming soon. they have nowhere to go. so we are looking at solutions for those space needs.

this is actually a very good, generically buildout 9000 square foot plant that could be used for a number of office uses, so there is nothing terribly particular about the buildout on the second floor that would preclude something, so i believe and adds value to our portfolio, and you would be seeing some and a number of these items that could potentially backfill, if, indeed, the cjh -- cjc is not the occupant. >> -- supervisor chu: i think it is important. through legislation, we had transferred over the operations of many the court facilities, except where the city had already entered into a lease or existing space, in which case as part of the transfer agreement, we would pay a court facility fee basically that was roughly

$300,000 plus. the city, once we transferred that responsibility, is still responsible for paying that $300,000 amount to the state. is that correct? >> that is correct. supervisor chu: and we have basically been able to credit ourselves to the extent that we are paying for a lease. is that correct? we are actually cutting ourselves, not paying the state as much, because we are paying for this lease component, correct? >> it is a quirk in the legislation, but, yes, we are doing our best to take advantage of the letter and the spirit of the law, and it does allow for that. supervisor chu: snow, going forward, the court would have to pay the fate, correct? >> yes.

supervisor chu: there was also a chord construction fund that was put in place in 1992, and i think there were penalties and other things that is not really this is the money, so forfeitures, all kinds, forfeitd things that go into that fund are actually the state's money in it would be something that we would have to turn over to the state, except for when we are paying for leases, correct? >> generally, i believe that is correct. mr. levenson might want to add to that. >> [inaudible] supervisor chu: i think you have to turn on the microphone. >> yes. here we go. the court house instructions pay for debt service based on participation at the courthouse. supervisor chu: once the construction fund finishes paying off the debt service on that fund, and we have no longer

a lease obligation, that money would not be coming to the general fund. it would be referred to the state, right? >> correct. supervisor chu: it would be in our interest to have a lease that we could pay for in terms of the corpus of latifi? >> that is right. essentially, it is being paid for with funds that would otherwise go to the state. we are also getting credit on the courthouse facility payment costs. supervisor chu: thank you. supervisor avalos: -- supervisor kim: regarding your response about the need for additional real-estate for other services that the city provides, realistically, if the board in the city decides not to continue the city justice center, we are still looking at another two years? it is not as though in need that exists today will be a need that we have at the end of the year

2014? he said you are searching for four term leases. how realistic is that in terms of getting these urgent need leases that the city has? >> quite realistic. frankly, we are surprised. we did not think we would be able to negotiate those. in the civic center, a lot of things are queued up and a lot of activity will happen over the next four years that will change the rates. lots of people said they have taken rates and they would rather have someone in there, paying them something, but they foresee a time in the near future where the rates will go up substantially, if things progress as currently planned. i am not sure that that never really happens, but that is the plan. supervisor kim: what about something that could come up on cue, at that moment? >> there is nothing in particular, but there are a

number of current leases with expiration dates on this, within a few months thereof, that need time to space plan. supervisor kim: one of my concerns is that we do not continue the justice center. and by some series of incidents, all of our other surplus needs for property have been tied up. but you feel pretty strongly that that is not a scenario that will be in front of us? >> we do. supervisor kim: something that would be interested in would be amending the least to come back to the extension in march 2013 for a plan with what we could do with that space. hopefully we can ask the department of public health to

coincide their collaboration. >> i believe that they will do what they can to accelerate the study. if i understand the difficulties of this study, the control groups that have to be involved, it is a lengthy study if you want meaningful results. short and greatly, we may not have that level of confidence in results. supervisor chu: would real- estate be able to come back to us before executing the extension in march of 2013? potential real-estate needs that we could put in that site? >> we could certainly do that, yes. i think we should require that come back to us in 2013 in that space.

supervisor chu: thank you. let's open these two items up for public comment. are there members of the public debt which to speak on items five or six? i have two speaker cards. >> good afternoon, chairman and supervisors. in the executive director of the civic center community benefit district. for those of you who may not be a bit -- be aware, this was approved by the board of supervisors one year ago in january. we started the operation in july of 2011. the c j c m. the court are in the community benefit the district. even if they were not in our neighborhood, we believe that

the services that they provide are a benefit to our neighborhood and the entire city of san francisco. as we have seen with the housing that has been created over the last few years, housing that incorporates services for these inhabitants has been more successful long-term. while we have this major world renowned company doing the study for the cac, -- cjc, we can always rely on anecdotal evidence, but the data provided will be a great service in helping you to make a decision about whether or not to continue the program. obviously, for our district is a great addition to the neighborhood. so, thank you. supervisor chu: next speaker, please.

>> good afternoon. my name. cina -- name is dina h illiard. the issue of public safety is an important one for us. we are one of the only cities without a community ambassador or community died proponent -- component. we feel it is important to provide alternative solutions to the revolving door dynamic in the hall of justice. to us, see jcjc is a part of tht alternative. when it was first established, there was a lot of discussion in the neighborhood about whether or not it was needed, how it was performed or could benefit the neighborhoods in the city. the court was extremely sensitive to those concerns and they are one of the only bj they are one of the only collaborative courts to have a

community advisory board component with regular town hall meetings as part of the core mission. there are a lot of statistics that can illustrate the success of the court. captain gary, are you going to come up? the captain has put together some statistical numbers of cases that were referred to the cjc in 2010. there were 100 -- 1207 cases for ford. 2011, 1163. to date, there are 95. i know the court's perspective, as i am walking through the neighborhood i hear residents' talking about going to the cjc for help. that is the greatest marker of success, the word on the street, that that is where you can go to get alternative solutions to the revolving door. supervisor chu: thank you very

much. are there any other speakers that wish to speak on items five or six? >> can i submit this to you? the numbers? supervisor chu: yes. any other members of the public of like to speak on items five or six? >> good afternoon, supervisors. my name is carl hall. in the completion person. i began the program when they first started in august 2009. in september of 2010 i graduated from cjc and got off. not only did i graduate, but i got off of probation and have my taste -- had my case dropped. my record became a sponge. that by itself is a miracle and

something that no one going through the hall of justice system has any right to expect. cjc made that happen for me. it also made my life better since the day that i walked in. since the day that i walked in, i had only the clothes on my back. there were two years since that i have participated and i was able to get my life back. i had a wife one year ago. we adopted a puppy six months ago. we are planning a family that way. i am living my life the way that i was supposed to, many years ago. it is with the help of the cjc that i was able to open my eyes and see the opportunity for what it was. here was a neighborhood option

before me, to be able to pay my dues and get back to the community. i never thought that i would volunteer for anything in my life. i now volunteer at the cjc at their front desk, helping the clients. the word on the street that i hear is that the cjc continues to work. i have heard it from other people who have been through programs that work for them. it worked for me as well. to eliminate the cjc program from its location in the neighborhood that service would be an injustice. because that is right in the element, right in the neighborhood where most of the crimes in this city are committed. i do not have any numbers to back that up, but my point is

that in order for it to continue to be effective, to be what it is, it needs to be in the neighborhood. that neighborhood is being impacted on the negative side when it did not, and positively now that it is. i now live in that neighborhood, where i only hung out there before. i now live their income safe. thank you for your time. [applause] supervisor chu: thank you very much for your comments. are there other members of the public that wish to speak on items five or six? seeing no one, public comment is closed. given that, we have a number of amendments to take action on. we have a few recommendations to amend the proposed resolutions, 12003, 9 on page 2, changing the management

responsibilities from december 31, 2009, from december 31, 2008. there's also an amendment proposed on-line two, to change the date of the expiration from july 31, 2011, to june 30, 2011. there are those two amendments in addition to the ones proposed by an item number six, including the requirement that the real-estate department come back to the board in report on plans for the usage of that space prior to the extension -- expansion. i believe that those of the amendments on the table. colleagues, can we take those without objection? that will be the case. to the underlying items, is there a motion to send about items forward as recommended? okay, we do have a motion.

do we need a roll call? we have a motion to send those items forward as amended. i would just ask the real-estate department to work with our clerk to make sure that the language that was intended for the amendment gets incorporated into our files and provided to the court by this afternoon, so that we have it for tuesday. thank you. item number seven, please. >> item #7. kimordinance appropriating $1,000,000 of general fund prior year fund balance for the small business revolving loan fund program in the office of economic and workforce development for fy2011-2012. supervisor chu: thank you. for this item, we have holly from oud.

>> thank you. good afternoon, supervisors. in the program manager from the division of economic development. i am here today with emily, who is the executive director of working decision. we will be presenting on the agenda item in front of you. we were hoping that you would recommend this appropriation of $1 million of general funds to recapitalize the revolving loans. we have a power point presentation. just a little background about the revolving loan funds. launched in 2009, it was modeled after other loan funds that provide low-interest rate loans to persons that did bj do not qualify for traditional

services. as the name suggests, the revolving meaning is full of funds as hoped replenishes and bar wars pay back their loans to create new opportunities for new projects -- borrowers pay back their loans to create new opportunities for new projects. in 2009 it was funded with an $800,000 appropriation with community development block grants, as well as the title line department of commerce eda funds. the proposed ordinance in front of you is the proposal for $1 million in general fund monies. supplementing that, the wells fargo fund. the payments from the small business loan program of $77,000, giving the sum total of 1 million [unintelligible] that amount, 15%, would go in as the administrative fee.

giving the available capital. a couple of things to highlight about this recapitalization, the bells fargo funds are actually restricted funds. they are only targeted to the southeast sector of san francisco. they would not be available city-wide. this is a public-private agreement between wells fargo and the city to target the underserved neighborhoods. also, the wells fargo fund is a loan to the city that requires repayment. after the initial loans are made, in five years they would have to be repaid to wells fargo. regarding the administrative fee, this is a onetime fee. they will be not only administering the revolving loan fund, they would